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Republic vs. Intermediate Appellate Court

G.R. No. 69138. May 19, 1992.*

REPUBLIC OF THE PHILIPPINES (Bureau of Forest

Development), petitioner, vs. INTERMEDIATE APPELLATE
COURT (First Civil Cases Division) and HILARIO P. RAMA,
respondents.

Civil Law; Estoppel; The well-entrenched principle is that the State

cannot be put in estoppel by the mistakes or errors of its officials or agents.
—In the present case, the parcel of land titled in the name of Hilario P.
Rama is covered by an original torrens title issued in Rama's name on May
4, 1967. Earlier, he applied for the issuance of title based on a patent which
was given on January 13, 1967. The fact that he applied for a patent title
shows a recognition on his part that the parcel is part of the public domain.
True, government officials caused the issuance of the patent title and the
original torrens title covering the land in Rama's name, However, the well-
entrenched principle is that the State cannot be put in estoppel by the
mistakes or errors of its officials or agents.
Same; Land Titles; Considering that the subject parcel of land is forest
land, the patent and original certificate of title covering the subject parcel
issued to Rama did not confer any validity to his possession or claim of
ownership.—Considering that the subject parcel of land is forestland, the
patent and original certificate of title covering the subject parcel issued to
Rama did not confer any validity to his possession or claim of ownership.
Same; Same; The void ab initio titles issued cannot ripen into private
ownership.—The titles are void ab initio. (Heirs of Amunategui v.

______________

* THIRD DIVISION.

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Republic vs. Intermediate Appellate Court

Director of Forestry, 126 SCRA 69 11983]; Republic v. Animas, 56 SCRA

499 [1974]) The titles issued cannot ripen into private ownership. (Director
of Forestry v. Muñoz, 23 SCRA 1183 [1968]; Heirs of Amunategui v.
Director of Forestry, supra; Vallarta v. Intermediate Appellate Court, supra)
In effect, Rama's possession of the parcel from the beginning was fraudulent
and illegal. He was merely a squatter on the parcel. Under these
circumstances, we cannot see any reason why Rama should be considered a
possessor in good faith as defined in Article 526 of the Civil Code.
Same; Same; In the absence of anything to excite suspicion, the buyer
is not obliged to look beyond the certificate to investigate the title of the
sellers appearing on the face of the certificate.—In the Dizon case,
however, the occupants of the parcels of land which were adjudged as part
of the seashore or foreshore area and part of the public domain bought the
land from Alfonso and Jacobo Zobel relying on the original certificate of
title covering the parcels. This intervening event constitutes the difference
between the Dizon case and the present case. Dizon, et al. buyers of the
foreshore lands were protected by the principle that an innocent buyer of a
registered land may rely on the torrens title of the seller. In the absence of
anything to excite suspicion, the buyer is not obligated to look beyond the
certificate to investigate the title of the sellers appearing on the face of the
certificate.

PETITION for review of the decision and resolution of the then

Intermediate Appellate Court.

The facts are stated in the opinion of the Court.

GUTIERREZ, JR., J.:

The decision of the trial court in this case declared the disputed
parcels of land to be forest land and, therefore, inalienable. The
appellate court sustained the factual finding. The issue raised in this
petition refers to the propriety of awarding necessary expenses to the
alleged possessor in good faith with right of retention until the
expenses are paid,
In May 1974, Anselmo Logronio, in his official capacity as
officer-in-charge of the Bohol Reforestation Project of the Bureau of
Forest Development, bulldozed portions of two (2) parcels of land
which he believed to be forest lands located at Talibon, Bohol,
occupied the same, and planted mulberry and

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other trees.
Soon thereafter, respondent Hilario P. Rama commenced in the
then Court of First Instance, now Regional Trial Court of Bohol, a
complaint for recovery of possession, ownership and damages
against Logronio alleging that he is the absolute owner and
possessor of the two (2) parcels of land occupied by Logronio. He
specifically described the two (2) parcels of land as follows:

A. A parcel of land, Lot 1, Psu-218360 beginning at a point marked "1" of

Lot 1, Psu 218360, being N. 41-39 E., 15391.24 m. from B.L.L.M. No. 1,
Municipality of Carmen, Province of Bohol, thence N. 47-35 W., 163.40 m.
to point 2; S. 67-59 W., 173.82 m. to point 3; N.517 E., 250.71 m. to point
4; S. 71-33 E., 168.51 m. to point 5; S. 82-11 E., 107.55 m. to point 6; S. 0-
45 W., 228.32 m. to point 1; point of beginning x x x containing an area of
FIFTY ONE THOUSAND TWO HUNDRED AND TWENTY SIX
(51,226) square meters x x x evidenced by Original Certificate of Title No.
6148 (Free Patent No. 319750) Office of the Register of Deeds for the
Province of Bohol x x x also covered by Tax Dec. No. R-3859 in the name
of Plaintiff x x x assessed at P990.00 x x x.
B. A parcel of land (as shown on plant H-154932, LRC Rec. No.),
situated in the Barrio of Malitbog, Municipality of Trinidad, Province of
Bohol. Bounded on the H., (sic) along lines 1-2-3 by the property of Rufino
Autida (H-166571), on the E,, along lines 4-5-6-7 by Creek; on the S., along
lines 7-8-9-10, by the Marinao Creek 4.00 m. wide; on the W., along line
10-11 by Public Land (Forest Zone), and on the N,, along lines 11-12-1 by
the property of Angel Jumawan x x x containing an area of Ninety Six
Thousand Three Hundred Forty Three (96,343) square meters x x x covered
by Tax Dec, No. R-4019 in the name of Plaintiff x x x with an assessed
value of P1,390.00 x x x.'
xxx
(Record on Appeal, pp. 54-56)

In his answer, Logronio claimed that the two parcels of land are
forest lands and that the questioned acts were performed by him in
the regular and lawful performance of his duties as officer-in-charge
of the Bohol Reforestation Project of the Bureau of Forest
Development. He prayed for the dismissal of the complaint.
Petitioner Republic filed a motion for leave to intervene attaching
its complaint-in-intervention.

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The complaint-in-intervention alleged that Logronio's acts were

authorized by the government through the Director of the Bureau of
Forest Development in connection with the reforestation program of

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the government; that the two (2) subject parcels of land are located
within the timberland Block D, L. C. Project No. 33 of Talibon,
Bohol per BF Map L.C. 686 and, therefore, are forest lands; that the
said lands were never released by the government as alienable and
disposable lands, hence, are not susceptible of disposition or private
appropriation under the provisions of the Public Land Act
(Commonwealth Act No. 41), as amended, nor were the said parcels
of land registered under the provisions of the Land Registration Law
(Act No. 496), as amended. It prayed that Free Patent No. 319750
covering the forest portion of the first lot be declared null and void;
that the Register of Deeds be ordered to cancel OCT No. 6148
covering the said forest portion; that both forest lands be reverted
back to the public domain; and that the complaint against Logronio
be dismissed.
The motion was granted and the complaint-in-intervention was
admitted by the lower court.
Rama, then, filed an answer to the complaint-in-intervention
alleging that the Republic has no cause of action, and is guilty of
estoppel for having caused the issuance of the certificate of title
covering the forest land. He claimed that if his title is to be
cancelled, and he is deprived of ownership over the parcels of land,
he should be paid by the Republic for all existing improvements plus
whatever expenses he has incurred in connection with the
improvement of said lands.
The trial of the case resulted in the following undisputed facts
stated in the decision of the lower court:

x x x      x x x      x x x
"1 On parcel A in the complaint. The evidence discloses that Lot 1 Psu-
218360, as described in the complaint, and containing area of 51,226 square
meters, is one of the two lots covered by OCT No. 6148 (Free Patent Title
No. 319750) in the name of Hilario Piscos Rama (Exhs. A and A-1) and is,
according to the plaintiff, free from any liens or encumbrances.
Thus, plaintiff Hilario P. Rama, 42 testified that of the two parcels of
land mentioned in the complaint, one parcel was covered by title, as shown
by a xerox copy of OCT No. 6148 (Exhs. A and A-1), and

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by tax declaration No. R-3859 (Exh. B); that he secured a certification from
the Office of the District Forester, Tagbilaran City, regarding the status of
the land covered by OCT 6148 (Exh. C); that he had a plan of the land
covered by OCT No. 6148 (Exh. D); that in the memorandum of
encumbrances on OCT No. 6148 (Exh. A-1), Entry No. 3382 referred to a
real estate mortgage executed on 23 November 1967 by Hilario Piscos

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Rama and Socorro Regañon in favor of the Development Bank of the

Philippines, but the obligation was already paid, and there was a written
release of the mortgage in 1975, which was not yet registered because when
he went to the Registry of Deeds payment was required for registering the
release and he did not have money at that time.
As shown in OCT No. 6148 (Exh. A), the free patent title was given on
13 January 1967, and the certificate of title was issued on 4 May 1967. Then
on 7 November 1967, the Office of the District Forester, Tagbilaran City,
issued Certification No. 57 (Exh. C) to the effect 'that according to the
records of this Office, there is no pending case as far as the Bureau of
Forestry is concerned, involving the validity of the title over a parcel of land
containing an area of 10.2450 hectares covered by Original Certificate of
Title No, 6148 (Free Patent No. 319750 situated in barrio of Malitbog,
Municipality of Dagohoy, Province of Bohol issued by the Register of
Deeds of Tagbilaran City on January 13, 1967 in the name of Hilario Piscos
Rama, Filipino, of legal age, married to Socorro Riganon, and resident in
Malitbog, Dagohoy, Bohol.'
Meantime, on 11 September 1967, Hipolito Amihan, Forester in Charge
of the Bohol Reforestation Project, Dagohoy, Bohol, addressed a letter to
the Administrator, Reforestation Administration, Diliman, Quezon City, thru
the Regional Officer, Cebu City, (Exh. 8), stating that relative to OCT No.
6148 in the name of Hilario Piscos Rama—

'Upon verification of the area in question it is found out that Lot I in an area of
51,226 sq. m. is within the area of Bohol Reforestation Project, Dagohoy, Bohol.
xxx.'

and recommending 'that Lot No. 1 under PSU-21-8360 with an area of

51,226 sq. m. under Free Patent No. 318750 issued in favor of Mr. Hilario
Piscos Rama be cancelled.'

On 29 October 1974, Lope D. Reyes, Assistant OIC, Legal Staff, Bureau

of Forest Development, Diliman, Quezon City, sent a memorandum to the
OIC Silviculture Division (Exh. 1), requesting that OCT No. 6148 issued in
favor of Hilario Piscos Rama 'be verified as to whether or not the area is
inside a timberland or alienable or disposable land.' And on 22 November
1974, Primo P. Andres, Officer in Charge, Silviculture Division, Bureau of
Forest Development, Dili-

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man, Quezon City, returned by first indorsement (Exh. 2) the aforesaid

memorandum with the information that per verification and control—

'1. Lot 1, PSU-218360 is within the Timberland Block-A of LC Project No. 33 of

Talibon, Bohol, per BF Map LC-685, and;

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2. Lot 2, PSU-218360, is within the Alienable or Disposable Block-I, of LC

Project 33 of Talibon, Bohol, certified as such on September 7, 1927, per BF Map
LC-685.'

And the Commissioner's Report (Exh. A-Commissioner) finds that—

'On Lot 1, Psu-218360 and (sic) approximate area of 45,826 sq. m. colored green on
the sketch is inside the Timberland and 5,400 sq. m. more or less is in the Alienable
and Disposable Area.'

And the Commissioner, Emmanuel Maboloc, 38, Junior Geodetic

Engineer, Bureau of Forest Development, Region VII, Cebu City, testified to
this effect, stating, however, that he did not make technical descriptions of
the portion of the lot within the Bohol Reforestation Project and the portion
outside it, so that, if required, he would have to go to the field again to make
such technical descriptions." (Record on Appeal, pp. 61-65)
x x x      x x x      x x x
"2. On parcel B in the complaint.—xxx
The land is covered by TD No. R-4019 in the name of plaintiff Hilario
Piscos Rama (Exh. F) and was surveyed for the Heirs of German Remarata
in 1952, as shown by the technical description (Exh. G) and plan H-154932
(Exh. H). But the land is not covered by any certificate of title.
On 12 March 1968, the Office of the District Forester, Tagbilaran City,
issued Certification No. 90 (Exh. I) to the effect 'that the parcel of land
containing an approximate area of 9.6345 hectares situated in Barrio
Malitbog, Municipality of Dagohoy, Province of Bohol, described in the Tax
Declaration proposed in the name of German Remarata, a resident of Bo.
Malitbog, Dagohoy, Bohol was verified by a representative of this Office
and was found to be within the Alienable and Disposable Block "1", Land
Classification Project No. 33, Talibon, Bohol, L.C. Map No. 685, certified
on September 7, 1927.' And on 4 March 1970, the Office of the District
Forester, City of Tagbilaran, thru Acting District Forester Pastor O. Ibarra,
issued Certification No. 101 (Exh. J), which is similarly worded as
Certification No. 90 (Exh. I), except that the proposed tax declaration is 'in
the name of HILARIO PISCOS RAMA.'

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But on 15 May 1974, the Office of the District Forester, City of

Tagbilaran, thru District Forester Pastor O. Ibarra, sent a letter to
Hilario P. Rama (Exh. 4) informing him 'that CERTIFICATION NO.
101, issued to you on March 4, 1970, by the District Forester of
Tagbilaran City, is hereby revoked on the ground that after thorough
(sic) investigation by representative of this Office the parcel of land
which you claim and the subject matter in the above-mentioned
CERTIFICATION NO. 101, is found to be within the Bohol
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Reforestation Project/ And on the same date, a letter to the same

effect was sent by District Forester Ibarra to the Provincial Assessor,
City of Tagbilaran (Exh. 5).
The Commissioner's Report (Exh. A-Commissioner) inter alia
states:

"It was found out that on lot H-154932 an approximate area of 94,719 Sq. M. is
inside Timberland block A, Project No. 33 a part of Bohol Reforestation Project
(colored green on the sketch plan) and only approximately 1,624 Sq. M. is inside the
Alienable and Disposable area colored orange on the sketch plan.'

Likewise, Commissioner Maboloc declared that he did not make technical

descriptions of the portion of said lot within the Bohol Reforestation Project
and the portion outside it." (Record on Appeal, pp. 66-68)

In view of its findings that the two (2) subject parcels of land are
forest lands, the lower court declared as null and void the Certificate
of Title covering the first lot in the name of Rama and ordered him
to vacate the said parcel "upon being reimbursed by the intervenor in
the sum of SIX THOUSAND PESOS (P6,000.00) as necessary
expenses." As regards the second parcel of land, the lower court
ordered Rama to vacate the same parcel of land "with right to refund
from the intervenor for the necessary expenses in the sum of
THREE THOUSAND PESOS (P3,000.00), but without rights of
retention." The dispositive portion of the decision reads:

"WHEREFORE, judgment is hereby rendered, as follows:

1. Relative to Lot 1, Psu-218360, (parcel A in the complaint):

declaring that portion thereof indicated in the Commissioner's
Report (Exh. A-Commissioner) as having an 'approximate area of
45,836 Sq. M. and shown on the sketch (Exh. B

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Commissioner) as timberland and therefore part of the public

domain (colored green, Parcel B in said sketch); declaring null and
void Original Certificate of Title No. 6148 in the name of
HILARIO PISCOS RAMA insofar as it includes the aforesaid
portion; and ordering the plaintiff to vacate said portion upon being
reimbursed by the intervenor in the sum of SIX THOUSAND
PESOS (P6,000.00) as necessary expenses;
2. Relative to the parcel of land shown on plan H-154932 (parcel B in
the complaint): declaring that the portion thereof indicated in the
Commissioner's Report (Exh. A-Commissioner) as having an
approximate area of 94,719 Sq. M.' and shown on the sketch (Exh.

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B-Commissioner) as timberland and therefore part of the public

domain (colored green, Parcel A in said sketch); declaring null and
void Tax Declaration No. R-4019 (Exh. F) insofar as it includes the
aforesaid portion; and ordering the plaintiff to vacate said portion,
with right to refund from the intervenor for the necessary expenses
in the sum of THREE THOUSAND PESOS (P3,000.00), but
without right of retention;
3. Dismissing the complaint as against defendant Anselmo Logroño,
both in his private and in his official capacity;
4. Dismissing defendant Logroño's counterclaim; and
5. Ordering the Register of Deeds of the Province of Bohol to
annotate this judgment relative to Lot 1, Psu-218360 at the back of
Original Certificate of Title No, 6148,
Without pronouncement of costs."
(Record on Appeal, pp. 77-79)

Petitioner Republic appealed the lower court's decision to the then

Intermediate Appellate Court, now Court of Appeals, insofar as it
ordered petitioner Republic to pay Rama the necessary expenses
with the right of retention over the titled parcel of land.
The appellate court, however, did not only affirm the questioned
decision, but modified it by ruling that as regards the second parcel
which is not covered by any certificate of title, Rama has also the
right of retention until the necessary expenses awarded to him are
paid by petitioner Republic.
A motion for reconsideration was denied. Hence, the instant
petition.
In a resolution dated March 27, 1985, the Court gave due course
to the petition. Because of the reorganization of the Court after the
1986 political upheaval and subsequent changes

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caused by retirement of certain Justices, the case could not be

decided until its recent assignment to the undersigned ponente.
On May 15, 1989, we issued another resolution stating therein:

"Considering the length of time that this case has remained pending and as a
practical measure to ease the backlog of this Court, the parties shall, within
ten (10) days from notice, MANIFEST whether or not they are still
interested in prosecuting this case, or supervening events have transpired
which render this case moot and academic or otherwise substantially affect
the same." Rollo, p. 70)

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In response to this resolution, the Solicitor General, representing

petitioner Republic, filed on August 4, 1989, a manifestation stating
that he is not aware of any supervening event that may have
transpired which would render the case moot and academic.
As stated earlier, the only issue in this petition is the propriety of
awarding necessary expenses with right of retention over the two (2)
parcels of land in favor of the possessor in this case, Rama, until the
payment of the necessary expenses by petitioner Republic on the
ground that Rama is a possessor in good faith as defined in Article
526 of the Civil Code.
In ruling that private respondent Rama, the possessor of the two
forest lands is entitled to payment of necessary expenses, the
appellate court cited the case of Dizon v. Rodriguez, (13 SCRA 704
[1965]).
The background facts of the Dizon case are as follows:

"Hacienda Calatagan owned by Alfonso and Jacobo Zobel was originally

covered by TCT No. T-722. In 1938, the Hacienda constructed a pier, called
'Santiago Landing/ about 600 meters long from the shore into the navigable
waters of the Pagaspas Bay, to be used by vessels loading sugar produced by
the Hacienda sugar mill When the sugar mill ceased its operation in 1948,
the owners of the Hacienda converted the pier into a fishpond dike and built
additional strong dikes enclosing an area of about 30 hectares (of the Bay)
and converted the same into a fishpond. The Hacienda owners also enclosed
a similar area of about 37 hectares of the Bay on the other side of the pier
which was also converted into a fishpond. In 1949, the Zobels ordered the
subdivision of the Hacienda by ordering the preparation of the subdivision
plan Psd-27941 wherein

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fishpond No. 1 (with. 30 hectares) was referred to as Lot No. 1 and fishpond
No. 2 (with 37 hectares) was referred to as Lot No. 49. The plan was
approved by the Director of Lands, and the Register of Deeds issued, from
TCT No. T-722, TCT No. 2739 for lots 49 and 1 in the name of Jacobo
Zobel.
In 1950, Jacobo Zobel sold to Antonino Dizon, et al. Lot 49 for which
said purchasers obtained at first TCT No. T-2740 and later T4718, Lot 1, on
the other hand, was purchased by Carlos Goco, et al., who in turn, sold one-
half thereof to Manuel Sy-Juco, et al. Transfer Certificate of Title No. 4159
was issued in the names of the Gocos and Sy-Jucos.
On May 24, 1952, Miguel Tolentino filed with the Bureau of Fisheries an
application for ordinary fishpond permit or lease for Lot 49, and an
application for a similar permit, for Lot 1, was filed by his daughter
Clemencia Tolentino.

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The Dizons, Sy-Jucos, and Gocos filed a protest with the Bureau of
Fisheries, claiming the properties to be private land covered by a certificate
of title. This protest was dismissed by the Director of Fisheries, on the
ground that the areas applied for are outside the boundaries of TCT No. T-
722 of Hacienda Calatagan. This ruling was based upon the findings of the
committee created by the Secretary of Agriculture and Natural Resources to
look into the matter, that Lots 1 and 49 are not originally included within the
boundaries of the hacienda.
On October 1, 1954, the protestants Dizons, Sy-Jucos, and Gocos filed
an action in the Court of First Instance of Manila (Civ. Case No. 24237) to
restrain the Director of Fisheries from issuing the fishpond permits applied
for by the Tolentinos. The court dismissed this petition for non-exhaustion
of administrative remedy, it appearing that petitioners had not appealed from
the decision of the Director of Fisheries to the Secretary of Agriculture and
Natural Resources. On appeal to this Court, the decision of the lower court
was sustained (G.R. No. L-8654, promulgated April 28, 1956). The
protestants then filed an appeal with the Secretary of Agriculture and
Natural Resources. This time, the same was dismissed for being filed out of
time.
On August 16, 1956, the Dizons filed Civil Case 135 and the SyJucos
and Gocos, Civil Case 136, in the Court of First Instance of Batangas, to
quiet their titles over Lots 49 and 1. Named defendants were the Secretary
of Agriculture and Natural Resources and applicants Tolentinos. The
Republic of the Philippines was allowed to intervene in view of the finding
by the investigating committee created by the respondent Secretary, that the
lots were part of the foreshore area before their conversion into fishponds by
the haciendaowners.

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On January 30, 1958, after due hearing, the Court of First Instance of
Batangas promulgated a joint decision making the finding, among others,
that the subdivision plan Psd-27941 was prepared in disregard of the
technical description stated in TCT No. T-722, because the surveyor merely
followed the existing shoreline and placed his monuments on the southwest
lateral of Lot 49, which was the pier abutting into the sea; and made the
conclusion that Lots 1 and 49 of Psd-27941 were part of the foreshore lands.
As the certificate of title obtained by petitioners covered lands not subject to
registration, the same were declared null and void, and Lots 1 and 49 were
declared properties of the public domain. Petitioners appealed to the Court
of Appeals,
"In its decision of October 31, 1961, as well as the resolution of August
20,1962, the appellate court adopted the findings of the lower court, that the
lots in question are part of the foreshore area and affirmed the ruling
cancelling the titles to plaintiffs. Although in the decision of October 31,
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1961, the Court of Appeals awarded to applicants Tolentinos damages in the

amount of P200.00 per hectare from October 1, 1954, when plaintiffs were
notified of the denial of their protest by the Director of Fisheries, such
award was eliminated in the resolution of August 20,1962, for reason that
plaintiffs, who relied on the efficacy of their certificates of title, cannot be
considered possessors in bad faith until after the legality of their said titles
has been finally determined. Appellants were thus declared entitled to
retention of the properties until they are reimbursed by the landowner, the
Republic of the Philippines, of the necessary expenses made on the lands, in
the sums of P40,000.00 (for Lot 49) and P25,000.00 (for Lot 1). It is from
this portion of the decision as thus modified that defendants Tolentinos and
the intervenor Republic of the Philippines appealed (in G.R. Nos. L-20355-
56), claiming that plaintiffs' possession became in bad faith when their
protest against the application for lease was denied by the Director of
Fisheries. In addition, the intervenor contends that being such possessors in
bad faith, plaintiffs are not entitled to reimbursement of the expenses made
on the properties/' (at pp. 705-708; Emphasis supplied)

The appellate court's decision was appealed to us by both the

Republic and the Dizons, et al.
We dismissed both appeals.
A comparative study of the present case and the Dizon case
shows different circumstances which make the Dizon case not
applicable to the instant case.
In the present case, the parcel of land titled in the name of

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Hilario P. Rama is covered by an original torrens title issued in

Rama's name on May 4, 1967. Earlier, he applied for the issuance of
title based on a patent which was given on January 13, 1967. The
fact that he applied for a patent title shows a recognition on his part
that the parcel is part of the public domain. True, government
officials caused the issuance of the patent title and the original
torrens title covering the land in Rama's name. However, the well-
entrenched principle is that the State cannot be put in estoppel by the
mistakes or errors of its officials or agents. (Republic v. Court of
Appeals, 135 SCRA 156 [1985]; and Republic v. Aquino, 120
SCRA 186 [1983])
Considering that the subject parcel of land is forest land, the
patent and original certificate of title covering the subject parcel
issued to Rama did not confer any validity to his possession or claim
of ownership. (Sunbeam Convenience Foods, Inc. v. Court of
Appeals, 181 SCRA 443 [1990]; Vallarta v. Intermediate Appellate
Court, 151 SCRA 679 [1987]; Republic v. Court of Appeals, 148
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SCRA 480 [1987]; Republic v. Court of Appeals, 135 SCRA 156

[1985])
The titles are void ab initio. (Heirs of Amunategui v. Director of
Forestry, 126 SCRA 69 [1983]; Republic v. Animas, 56 SCRA 499
[1974]) The titles issued cannot ripen into private ownership.
(Director of Forestry v. Muñoz, 23 SCRA 1183 [1968]; Heirs of
Amunategui v. Director of Forestry, supra; Vallarta v. Intermediate
Appellate Court, supra) In effect, Rama's possession of the parcel
from the beginning was fraudulent and illegal. He was merely a
squatter on the parcel. Under these circumstances, we cannot see any
reason why Rama should be considered a possessor in good faith as
defined in Article 526 of the Civil Code.
In the Dizon case, however, the occupants of the parcels of land
which were adjudged as part of the seashore or foreshore area and
part of the public domain bought the land from Alfonso and Jacobo
Zobel relying on the original certificate of title covering the parcels.
This intervening event constitutes the difference between the Dizon
case and the present case. Dizon, et al. buyers of the foreshore lands
were protected by the principle that an innocent buyer of a registered
land may rely on the torrens title of the seller. In the absence of
anything to excite suspicion, the buyer is not obligated to look
beyond the

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102 SUPREME COURT REPORTS ANNOTATED

Republic vs, Intermediate Appellate Court

certificate to investigate the title of the sellers appearing on the face

of the certificate. (Philippine National Bank v. Court of Appeals, 187
SCRA 735 [1990]; Gonzales v. Intermediate Appellate Court, 157
SCRA 587 [1988]; Philippine National Cooperative Bank v.
Carandang-Villalon, 139 SCRA 570 [1985]); Penullar v. Philippine
National Bank, 120 SCRA 171 [1983])
Another distinction between the two (2) cases is in the degree of
participation of the parties and the public officials in the titling of the
subject parcels of land. In the present case, respondent Rama was
the one who secured a certificate from the office of the District
Forester, Tagbilaran City as regards the status of the parcel of land
with his representations that "he had a plan of the land." It appears,
therefore, that it was through the representations of Rama that the
land was titled in his name. Some months later, however, or on
November 7, 1967, the Office of the District Forester suspected that
the parcel of land thus titled was forest land. Why this angle was not
pursued is not shown in the records, It, however, negates the good
faith of Rama who actively pursued the titling of the parcel in his
name.

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Good faith which entitles the possessors to necessary expenses

with right of retention until reimbursement was explained in the
Dizon case:

"On the matter of possession of plaintiffs-appellants, the ruling of the Court

of Appeals must be upheld. There is no showing that plaintiffs are not
purchasers in good faith and for value. As such titleholders, they have
reason to rely on the indefeasible character of their certificates.
"On the issue of good faith of the plaintiffs, the Court of Appeals
reasoned out:

The concept of possessors in good faith given in Art. 526 of the Civil Code and
when said possession loses this Character under Art. 528, needs to be reconciled
with the doctrine of indefeasibility of a Torrens Title. Such reconciliation can only be
achieved by holding that the possessor with a Torrens Title is not aware of any flaw
in his Title which invalidates it until his Torrens Title is declared null and void by
final judgment of the Courts.
'Even if the doctrine of indefeasibility of a Torrens Title were not thus reconciled,
the result would be the same, considering the third paragraph of Art. 526 which
provides that:

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VOL. 209, MAY 19, 1992 103

Republic vs. Intermediate Appellate Court

'Art. 526. x x x
'Mistake upon a doubtful or difficult question of law may be the basis of good
faith.

The legal question whether plaintiffs-appellants' possession in good faith, under their
Torrens Titles acquired in good faith, does not lose this character except in the case
and from the moment their Titles are declared null and void by the Courts, is a
difficult one. Even the members of this Court were for a long time divided, two to
one, on the answer. It was only after several sessions, where the results of exhaustive
researches on both sides were thoroughly discussed, that an undivided Court finally
found the answer given in the next preceding paragraph. Hence, even if it be
assumed for the sake of argument that the Supreme Court would find that the law is
not as we have stated it in the next preceding paragraph and that the plaintiffs-
appellants made a mistake in relying thereon, such mistake on a difficult question of
law may be the basis of good faith. Hence, their possession in good faith does not
lose this character except in the case and from the moment their Torrens Titles are
declared null and void by the Courts.'

Under the circumstances of the case, especially where the subdivision plan
was originally approved by the Director of Lands, we are not ready to
conclude that the above reasoning of the Court of Appeals on this point is a
reversible error. Needless to state, as such occupants in good faith, plaintiffs
have the right to the retention of the property until they are reimbursed the

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necessary expenses made on the lands. With respect to the contention of the
Republic of the Philippines that the order for the reimbursement by it of
such necessary expenses constitutes a judgment against the government in a
suit not consented to by it, suffice it to say that the Republic, on its own
initiative, asked and was permitted to intervene in the case and thereby
submitted itself voluntarily to the jurisdiction of the court." (at pp. 709-710;
Emphasis supplied)

With the foregoing findings, the appellate court's ruling as regards

the unregistered parcel of land which is to the effect that Rama is
also entitled to necessary expenses with right of retention until
reimbursed of the necessary expenses must be reversed. His title
over the forest land is null and void for the same reasons. There are
no special circumstances which would warrant the application of the
Dizon case.

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104 SUPREME COURT REPORTS ANNOTATED

Republic vs. Intermediate Appellate Court

WHEREFORE, the petition is GRANTED. The questioned decision

and resolution of the then Intermediate Appellate Court, now Court
of Appeals, are SET ASIDE in so far as they ordered petitioner
Republic to pay private respondent Hilario P. Rama the necessary
expenses incurred by him, with right of retention over the two (2)
parcels of land adjudged as forest lands until reimbursed of the
necessary expenses. The decision of the then Court of First Instance
of Bohol (now Regional Trial Court of Bohol) in Civil Case No.
2613 is MODIFIED in that the portion of the decision which ordered
petitioner Republic to pay private respondent Hilario P. Rama
necessary expenses with right of retention in parcel number one
described in the complaint is DELETED. In all other respects, the
questioned decision and resolution are AFFIRMED. No costs.
SO ORDERED.

     Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.

Petition granted; decision and resolution set aside,

Note.—Indefeasibility of a torrens title issued pursuant to a

patent may be invoked only when the land involved originally form
part of the public domain not when the land is of private ownership
(Agne vs. Director of Lands, 181 SCRA 793).

——o0o——

105

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